Lottomatica agrees to acquire CIRSA for €2.8bn in all-share deal

By Gonzalo Marín, Sector Operations Correspondent.

The transaction unites the Italian company Lottomatica and the Spanish firm CIRSA in an all-share deal valued at €2.8 billion; Lottomatica will deliver 0.668 new shares for each share of CIRSA, and Blackstone will become the largest investor in the resulting group. The combined group projects a core adjusted pro forma operating profit of €2.000 million (US$2.3bn) and will maintain listings on Euronext Milan and Spanish stock exchanges.

Lottomatica acquires CIRSA: key deal terms

Lottomatica has agreed to acquire CIRSA in a 100% share transaction with a consideration fixed at 0.668 new Lottomatica shares for each CIRSA share tendered in the offer. This exchange ratio sets the implied price per share of CIRSA at €16.55, a figure that Reuters has calculated as a premium of just over 21% over the close on the Tuesday prior to the announcement.

The deal values the combined entity at €2.8 billion, and according to the companies, it produces a group whose adjusted pro forma operating profit figure will reach €2.000 million (US$2.3bn). Prior to the deal closing, CIRSA will pay its shareholders an extraordinary dividend of €262 million.

"The transaction appears strategically attractive: Lottomatica is using its capital to acquire a company with a lower valuation, maintaining 67.5% of the combined group," analysts at JPMorgan wrote in a note.

Financial Impact and Synergies of the Deal

The companies estimate that the merger will generate €115 million in cash benefits before taxes over a three-year horizon from the closing. During that same period, management plans to return up to €4.000 million to shareholders via dividends and share buybacks.

Announced financial effects include:

• extraordinary dividend payment of €262M by CIRSA before closing;

• estimated synergies and cash benefits of €115M pre-tax over three years;

• shareholder return program of up to €4.000M in dividends and buybacks during the specified period.

These figures appear in the companies' joint communication and do not detail the breakdown by geography or business line.

Governance, Shareholding, and Structure of the New Entity

The combined group will retain the name Lottomatica and will be domiciled with its main office in Rome, with secondary CIRSA offices in Barcelona. The current CEO and chairman of Lottomatica, Guglielmo Angelozzi, will remain at the helm of the group.

Blackstone, currently the principal shareholder of CIRSA, will be the single majority shareholder of the new group following the operation and will appoint two new directors to the board, adding to the 11 directors that Lottomatica already has.

The resulting company will continue to be listed on Euronext Milan and on Spanish exchanges, thereby maintaining access to both Italian and Spanish investors.

What do the terms imply for shareholders and the market? (/b2b)

For CIRSA shareholders, the exchange of 0.668 Lottomatica shares per CIRSA share means receiving shares of the combined entity plus an extraordinary dividend of €262M before closing. For current Lottomatica shareholders, the combination leaves the company controlling 67.5% of the merged group's capital.

From the market's perspective, the merger creates what the companies describe as the second-largest publicly traded group globally in gaming and betting by market capitalization and operational scale. The operation incorporates Spanish assets under CIRSA and Lottomatica's leadership position in Italy.

Analysts' Reaction and Next Regulatory Steps (/news)

JPMorgan analysts highlighted the strategic logic of the acquisition, citing Lottomatica's strong execution in Italy and the growth opportunity in Spain: "Having executed exceptionally well in Italy —where it is number one in an attractive and growing market— we see Spain as the next logical growth leg." The JPMorgan note is cited in the public communication to the market.

Next steps include formalizing the share exchange, the extraordinary dividend payment by CIRSA, and the necessary regulatory and corporate approvals in both jurisdictions. The companies have not released the exact timeline for closing or the specific regulatory conditions that must be met.

What investors and suppliers should watch out for (/b2b)

Investors should monitor the timing of the extraordinary dividend of €262M, the realization of synergies amounting to €115M, and the shareholder return plan of up to €4.000M. Suppliers and business partners will need to adjust contracts and operations to the new corporate structure and governance with Blackstone as the main investor.

Key points that will mark the effective execution of the plan are the operational integration between the Italian and Spanish platforms, the integration of management teams, and the implementation of the announced capital return policy.